Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at investing in silver. (See the Precious Metals section.)
Precious Metals (Silver):
The recent breakout in the spot price of silver to above $16.28 per Troy ounce probably has some short-selling traders quaking in their boots. The price ratio of silver-to-gold is now running around 88-to-1, which although down from the recent absurd 92-to-1 high still screams opportunity for silver investors. I suspect that the price of silver will escape the market manipulators and the silver-to-gold ratio will revert to around 75-to-1, or possibly even lower. (75-to-1 would mean a spot price for $18.88 for silver, assuming that gold holds at around $1,415 per ounce.) And in the long run, with more silver than gold being consistently “used up” in unrecovorable industrial processes, I expect the silver to gold ratio to be down around 25-to-1, by the end of the 21st Century. Watch the metals markets closely, folks. I’ll admit that I’ve always had a predilection for silver, but the fundamentals here would convince just about anyone that the Silver Bull may soon have his day!
Economy & Finance:
The “Scared & Desperate” Fed Is Playing The Most Dangerous Game. Here is a key quote:
“On Wednesday odds for a 50bp rate cut had dropped to 34%, by the time Clarida, Bullard, and Williams were done these odds had skyrocketed to 71%.
Come on. None of this is an accident.
JP Morgan now expects 12 central banks to cut rates in the next 2 months. The global easing cycle has begun. With negative rates still in place.
What’s all this really tell us? A recession is coming, they know it and they are desperate to prevent it. It also says zero rates are coming back and I suspect, in due time, negative rates. Which means markets will eventually drop despite the current efforts to jam things higher.
But a Fed desperate to jawbone markets higher, to “influence markets” is playing the most dangerous game.
A Fed admitting they have limited ammunition and are openly abandoning their data dependency mantra to stop the business cycle is an open admission of weakness. And a weak Fed may commit the worst sin a Fed can commit: Lose confidence of the market. And once that happens all things are possible…”
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Millions of acres of Midwest farmland eligible for U.S.-backed insurance. JWR’s Comment: The harvest numbers for 2019 are bound to be very low. This will drive higher grain prices. Count on it!
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Taxes and Control:
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State Tax Changes as of July 1, 2019. One notable item in this article was about California’s spiraling fuel taxes: “As the second part of a gas tax increase approved by legislators in 2017, California’s gas tax rose 5.6 cents per gallon on July 1, bringing total state taxes and fees on gasoline to 57.8 cents per gallon and surpassing Pennsylvania for the highest state taxes and fees on gasoline.”
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I believe that we are now witnessing the lowest point in the “Trump Slump” dip in AR-15/M4 rifle prices. Presently, over at Palmetto State Armory (one of our affiliate advertisers), you can but a complete M4 lower with a Blackhawk 6-position stock for $99.99 postage paid, and a complete upper with 16″ barrel for 179.99 postage paid. So… For under $280, you are getting a complete 5.56mm semi-auto rifle (minus a magazine.) $280 in 2019 (inflated) Dollars is an absurdly low price for an M4. For a point of comparison: A Ruger Mini-14 Tactical Rifle presently has a suggested retail price of $1,169.
Consider this: If any Democrat wins the 2020 presidential election, then I expect the price of ARs to jump up to somewhere north of $1,100 for basic/generic models, and much more for the best quality variants. There are very few investments with the chance to more than double in 18 months. So if you have any room in your gun vault, then stack them deep!
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Makers & Shakers: George Gruhn on the State of the Vintage Guitar Market. Here is a quote:
“What’s the main difference between the vintage and new guitar markets? There are many differences. For one thing, there are a lot more recent-issue and utility-used guitars out there than vintage guitars. It took Martin from 1833 to 1947 to make 100,000 guitars, and they hit serial number 100,000 in 1947 and 1,000,000 in 2004. Now they’re now well past 2,000,000, which means the majority of Martin guitars ever made have been made since 2004. Taylor’s also way up. Gibson and Fender are way up. Fender didn’t get started until 1946, but Fender makes a lot more guitars per year than Martin, and it didn’t take long for Fender to make more guitars than Martin had made in their entire history.
The number of vintage guitars, however, is tiny. The number of vintage Martins is way, way smaller, because the ones that most of the collectors are really looking for were made from about 1928 through the early ’40s.”
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who closely watch specific markets. If you spot any news that would be of interest to SurvivalBlog readers, then please send it in. News from local news outlets that is missed by the news wire services is especially appreciated. And it need not be just about commodities and precious metals. Thanks!